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In Reply to: RE: price and value.. Two different things.. posted by DaveT on September 25, 2016 at 06:39:59
When you are taking a wire, stripping off insulation then hand re wrapping it, That is not a business model of work. That is a hobby based fooling around.
IF someone thinks they should be paid for such stuff.. I guess if they make it clear what they are doing. (If you asked ME to pay for you stripping THNN then hand wrapping it in teflon tape? I would say your work is ridiculous, dangerous and totally unsafe, Since the voltage rating of the Teflon tape is not given, nor is just wrapping with it safe practice. I would have 'expected' you to actually BUY Teflon coated wire with proper voltage ratings to make a product to 'sell'. Since your hand wrapped wire is most likely no legal for sale as intended use is to carry 120V current.) stuff like that is the problem... And thinking you CAN sell it is also a problem!
In the original case the problem is the person under discussion does not say how of under what conditions he make his product.
What is actually IN his $13,000 or $20,000 cable?
Well, an issue is his own way of saying why his stuff is worth...
"God designed' and the EE claim when he has no such degree.
Both explained away by apologists.. But still left as nagging anyone wanting to have an honest playing field.
Maybe he is also stripping wire and re wrapping it, doing things which make the product unsafe and unfit for commercial sale?
I do not know. No one knows. I guess saying God designed it and making EE claims is supposed to make it all right?
On the other hand yes he can sell his toys, but some of us think folks should have a heads up. And this whole set of posts is to just allow folks to think about what sort of crazy stuff they may be buying.
You can make anything you want for your own use. When you start selling it for $13,000 or $20,000.. Some folks may ask questions, or make comments. Particularly when past issues show up.
Follow Ups:
First, I only cited my homebuilt cable as an example, and not as a real world example. However, I do have the electrical background to embark upon such a quest. The defense contractor I was working for at the time could easily have taken my idea, and mass produced the cable in its entirety without human intervention from source to packaging. To have custom automation machines made would be no problem. The R&D money of these companies and development of products rival the GDP of many countries.These companies have the resources to have Belden and any number of other wire manufacturers build cable to their specifications at the same time. Reels of unused cable were often tossed to make room. Although, the company would via economies of scale manufacture the cables at a fraction of the cost of my example. But I can insure you that they would not discount the product one penny, and if anything they probably would use Jon's multiple of 10-times. Where I worked in the company the prevailing multiple was 7-times. Once the R&D and startup cost were recovered the price of the product dropped. Once the initial cost were recovered, from the company's perspective every penny, thereafter, was 100% profit. So they could position the product's cost to meet or undercut the competition.
SS, I could have easily and affordably opted for pre-clad Teflon wire, but for me that was not the fun. I did not undertake the project with the intent of manufacture. If I had - my approach would have been much different. You attributed intent to my example and then went on to make what I took to be a personal attack as to the folly of my experiment.
You stated you had a problem with Rick, his company, products, and his marketing statements. Again, I agree with you, that I feel there are many products that are ridiculously priced and the marketing hype is so much hot air. I don't bellyache all over the net because I think some products and the hype are crap.
On the other hand ,if you are forewarning us of possible safety concerns (as you did with my example) then I applaud you. Ranting for the sake of ranting is your right, but dismissing other factors that are involved (as a few of us here have done regarding labor, R&D) is not fair. I am not attacking you. If anything I was augmenting your argument. I just don't understand your concerns UNLESS it is specifically about Rick.
As I read your post, I, initially, read that you were saying the product was over priced based on the value of the components (period). If it is personal - count me out! I don't know you or Rick and I have no desire to intervene in a personal pissing contest.
DaveT
Edits: 09/26/16
I don't know if you bothered to read the referenced post, so just in case you (and/or others) didn't, I am copying it down below.
The reason I suspect you didn't, is because you continue to rail on about labor as if it were free. As I noted in my referenced post, and as DaveT noted, labor is not cheap, and skilled labor to do proper soldering and mechanical assembly is even more costly than general purpose labor.
You also talk about wrapping teflon tape as if it were some sort of hazard, except that in the example DaveT gave, he was wrapping what were already 600V rated wires, with ADDITIONAL insulation. It would not suddenly degrade to less than 600V, so I don't know where you were going with that comment, other than some sort of general negativity to high end cottage industry practices.
Finally, one thing I seldom see mentioned, is the cost to get Safety Agency listing or approvals for an AC power cord. This runs on the order of $5000 to $8000 for UL, and multiple samples must be submitted to the agency.
If you only manage to sell a hundred cables over a period of a year or so, your cost for the UL portion is now a significant amount per cable.
It is also an amount that has to be paid "upfront", not on a running basis as you make cables to order.
Jon Risch
COPY OF REFERENCED POST
***************************************************************
Re: Why are cables sooo expensive???
Cables costs can be higher than you think.
Lets take a look at a well known DIY coaxial cable, Belden 89259.
It currently costs around $1 a foot (now up to around $1.80 a foot, so increase all following costs appropriately)), and this is a stock item for the manufacturer that they make in quantity when they manufacture it. The cost here is mostly due to the teflon insulation material and teflon jacket. If you wanted a custom run of it, say changing just one thing that did not cost any more for Belden to make, then it might cost $3 or 4 a foot, and you would have to commit to a minimum quantity buy of say, 50,000 feet. This uses a good grade of ETP copper, not 99.999% pure, or some umpteen nines purity silver.
Let's say that you wanted OFHC 99.99% copper, this might jack the price up to almost double what it was as a custom cable, now in the range of $5-7 dollars a running foot.
Not so bad you might think, as you only use about 3 feet per side in a 1M stereo interconnect cable for a total of say approx. 7 feet of cable. So only $35-49 worth of cable in the product. Ah, but then there is now the cost of the RCA plugs, these can run up into the range of $10-20 apiece wholesale for the really fancy ones milled from solid material and quality plated and finished.
Then there is the HS, maybe some Techflex covering, silver solder, etc. Then the most expensive thing of all: hand labor to assemble them, as there is no way to afford machine termination for custom cable sizes AND off the beaten path RCA plugs for the smaller companies. In many cases, the simple act of soldering them up PROPERLY costs as much as the materials. So $100 worth of raw materials may cost another $50 to $100 OR MORE to assemble and test/check.
Then there is the packaging, advertising, distribution, overhead, and so on.
In the electronics industry, the usual rule of thumb is to multiply the parts cost by 5X to reach what the retail price should be. This is for mass market consumer gear. High end gear, due to the limited production (loss of large scale production efficiency), tends to run around 10X the parts cost in order to assure making some amount of profit from selling the gear. (It needs to be kept in mind that many items typically get sold for 10X their cost to manufacture: clothes, many toys, many appliances, etc.)
For the above mentioned example interconnect cables, this would amount to a reasonably fair selling price of nearly $1000 for a 1M pair of what amounted to a simple variation on good old Belden 89259 (using OFHC 99.99% pure copper). This is for a simple coaxial geometry, if the cables used a fancy geometry, or required even more labor to assemble, or used pure silver as the conductor, then the costs and final retail price would be even higher.
Now, once we get past this point, we are starting to enter the realm of what the market will bear, what the consumer thinks the product is worth, and is willing to pay for it. Whether it is due to brand name prestige, or some other marketing ploy, if consumers are willing to fork over the cash, then they will make it and sell it. This is NOT unique to the cable or audio industry, just pounced upon by some who like to see it as some sort of conspiracy or such.
As for these particular MIT speaker cables, I am not immediately familiar with the details of their construction, but if they use the typical MIT network box, then these parts costs and assembly time can be added to the equation, and likely the cable costs would be higher still for significant amounts of copper in the cable (speaker cable vs. interconnect cables).
For a ten foot pair of not very fancy high end speaker cables, the costs to manufacture might easily reach $200 or more, if the 10X rule of thumb is used, then the retail price would be somewhere on the order of $2000 or more. How much more might depend in part on the actual materials and labor involved.
The difference between $2000 and $3400 might be partially due to particularly expensive materials and construction, or a portion of it a result of what the market will bear. Use of pure silver alone would pretty much make up for the difference.
More ambitious cables, such as some of the woven/braided types that interleave the wires in a helical criss-crossing winding around a core can involve tremendous amounts of labor, very costly materials, and so on, so that actual costs to manufacture would stagger your mind. Again, with very limited production, no economy of scale, these are one off hand-built products, and they need to recoup their expenses every time they sell a set.
A fully hand built custom car can easily cost 10 to 100 times what most cars sell for. Should everyone run out and buy one? Many folks are quite happy with their mass produced Chevy's and Fords, so I don't see the custom car business putting them into any trouble anytime soon. Same with the really high priced cables, they are there and exist for the same kinds of reasons as custom cars, etc. Someone knows how to build them ever so tweaky to the nth degree, and then offers them for sale.
Jon Risch
Great points about Teflon tape. From memory, some of it is rated to 400V along with a very high heat rating. I took a look at my stash, and a couple of rolls are even marked "mil-spec"....and that's ordinary, Home Depot or Ace Hardware-bought tape. In other words, it's inherently safe.
because you continue to rail on about labor as if it were free
And a special thank you for saying this. Such an attitude is far too prevalent, and I've seen it for decades. Yes, perhaps there are abuses within the industry/hobby re: pricing, but very small economy of scale is something also not taken into consideration. While I build a modest amount of labor into my products, to be fair to my effort, I certainly am not going to work for 50 cents an hour. I am thankful many appreciate that effort, but understand there will always be those who don't.
"Once this was all Black Plasma and Imagination" -Michael McClure
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